Marine Link
Tuesday, October 16, 2018

Interview: Jeong-kie Lee, Chairman, Korean Register & IACS

Maritime Activity Reports, Inc.

October 12, 2018

  • Jeong-kie Lee, Chairman and CEO, Korean Register
  • Photo: Korean Register
  • Photo: Korean Register
  • Jeong-kie Lee, Chairman and CEO, Korean Register Jeong-kie Lee, Chairman and CEO, Korean Register
  • Photo: Korean Register Photo: Korean Register
  • Photo: Korean Register Photo: Korean Register

This month we caught up with Jeong-kie Lee, Chairman and CEO of the Korean Register and also the Chairman of the International Association of Classification Societies (IACS), for his insights on the dominant trends moving the maritime industry into the future.

The maritime industry has been challenged, to say the least. Today, where do you see challenge? Where do you see opportunity?

The maritime industry is in a state of extreme upheaval, with private and public organizations having to deal with a wide range of ever changing, complicated issues in the realms of technology, regulation, finance, economy and competition, while facing little certainty about the future.
Increasingly challenging regulations governing SOx, NOx and CO2 emissions alongside the new BWMS obligations have added significantly to the technical burden weighing on shipping companies. As we all know, the IMO and some national regulators keep raising the bar, increasing the minimum requirements for their environmental standards. One of the main problems is that the industry does not have enough time to prepare for these regulatory demands. The maritime industry is becoming a place where only the fittest will survive.  
Another significant challenge looking forward, is cyber security. As the shipping industry has become more and more digitalized, so cyber attacks on ships have increased. The shipping industry is the main artery of world trade, and so damage caused by cyber attacks can dramatically affect different industries across the global trade system and the impact is enormous.
KR sees the development of maritime autonomous surface ships (MASS) as one of the biggest opportunities facing the industry. MASS has potential to solve the problems the maritime industry has long faced; reducing human error, increasing the safety of ships and seafarers and improving environmental protection. Moreover, autonomous vessels will redefine the way the industry works and operates at sea, in ports, in shipyards and the onshore. But we are not there yet. Considerable collaboration is still needed between the regulators, shipyards, classification societies, shippers, insurers and industry to make autonomous vessels available at sea.

How has KR ‘weathered the storm?’ Specifically, how is the KR of 2018 most different from the KR of 2013? How is it still the same?

KR is a world-leading, technical advisor to the maritime industry, safeguarding life, property and the environment through the pursuit of excellence in its rules and standards. Founded in 1960 and becoming a member of the International Association of Classification Societies (IACS) in 1988, KR works hard to ensure that customers receive an immediate, high quality service wherever they are.
Today, KR is authorized by 78 governments to act as a Recognized Organization and has expanded its international network to offer customers services, the most recent being in Portugal which opened this year. Reflecting this global growth, as of July 2018, KR’s classed fleet stands at 68m GT and about one third of the society’s gross tonnage is now owned by international shipowners.  
Noting the rising importance of LNG as a marine fuel, KR has invested significant resources into the development of class technical services for global LNG partners. For example, KR has successfully completed the development of a standard design for each type of cargo containment system, targeting membrane tank LNG carriers of 170K working with the so-called ‘BIG 3’ shipyards (HHI, SHI and DSME). We provided full technical engineering services to build the world’s first small-scale floating regasification unit in 2016. In addition, KR provided technical class services to the world’s first LNG fueled bulk carrier built with high-manganese steel LNG fuel tanks in 2015.
To help our clients meet environmental regulations, in 2015, KR opened the world’s first Greenship Equipment test certification center in Gunsan, Korea to provide evaluation, analysis and test of greenship equipment including marine diesel engines. In 2016, we significantly expanded our land-based test facilities for Ballast Water Management System (BWMS) to offer the largest capacity for BWMS testing to our international clients. In fact, KR was accepted as the very first Independent Laboratory in Asia to be accredited by the United States Coast Guard.  
In 2017, KR opened a new ICT (information communications technology) Center to dramatically enhance the application of advanced information and ICT across the maritime and ship classification industries. Currently, significant R&D and specific projects in the fields of cyber security, autonomous vessels, big data, virtual reality and drones are being conducted. In addition, linked to the International Maritime Organization (IMO)’s e-Navigation strategy, the Korean Ministry of Oceans and Fisheries launched a SMART-Navigation project in 2016, which is scheduled to run from 2016-2020 with a budget of $114 million. As a key member of this SMART-Navigation project team, KR is conducting research and development into leading technologies as a basis for new international maritime standards.
Traditionally, most of KR’s revenue has been generated from class surveys for commercial vessels. However, since 2013, KR’s naval vessels business has grown considerably with revenue more than doubling. And this is not just the Republic of Korean Navy, KR now offers various class services to the Peruvian Navy, the Indonesian Navy and the Royal Thai Navy, and has done so for the last five years.
As a result of our efforts and achievements over the last five years, KR has solidified its international client base and the non-Korean KR-classed fleet size has increased substantially both with existing vessels and newbuilding.

In many respects this is a transcendent time in maritime history. What do you see as the three biggest trends that you feel will have the biggest impact on transport at sea in for the coming generation?

As already mentioned earlier, meeting the requirements of forthcoming environmental regulations, protecting the industry against ever-growing cyber security risks and the development of MASS are the three trends that will have the biggest impact on transport at sea in for the coming generations.
These three trends offer the greatest possibilities to reshape how we work, what we manufacture, how we train seafarers, to influence academic fields, legislation frames, the insurance industry and almost all areas of the maritime industry. Each of these factors will have a different but very significant impact on the industry over time.
But overall, KR does believe that without doubt, the ships of 2030 will be more robust, more automated, consume less fuel and emit less pollutants than the ships of today.
KR has already begun to lead the industry on each of these three trends. The work scope of KR’s ICT center embraces each one and we are already delivering specific technical and engineering services on each of these subjects to our clients. KR has been carrying out numerous projects with the Korean government, universities and maritime organizations to prepare for a cleaner, digitally safer and increasingly digitalized maritime industry. For example, KR has undertaken extensive technological research to develop and provide comprehensive cyber security services. We created our own specialist Cyber Security Task Force Team in 2016 and launched our cyber security guidelines in the same year. KR now provides technical cyber security consultancy services to U.K. based clients which include a comprehensive company-wide risk assessment to establish an effective, management system for any company’s ship cyber security, helping to protect against this growing threat.

In looking at digitalization we obviously focus on the ships, the fleets and fleet operation. But looking at this through the KR lens, how is the ‘digital revolution’ impacting how KR conducts its own business, in the field, in the office?
The digital revolution is impacting our business in many ways.
Firstly, KR is now using drones on a regular basis to conduct ship inspections, offering the service from its network of offices. The surveys are conducted onboard in and around ships in many of the high risk and difficult to access areas. Using unmanned aerial vehicles or underwater remotely operated vehicle drones, the drones can easily and safely explore confined spaces with restricted access, poor ventilation or environmental high-risk areas, or parts of the ship which would require scaffolding for surveyor access.  
Developed specifically for bulk carriers’ cargo holds and the ballast tanks in barges, KR is using the drones for close-up surveys too, to inspect detailed structural components. Already an important part of the decision making and assessment process, the drones provide clear visual data for analysis, which can be reviewed by KR’s inspectors in real time, complimenting their traditional skills.
Secondly, KR has been developing various VR based application systems since 2014, including a ship inspection training simulator and a ship crew safety training simulator and using digital 3D replicas of the relevant ship, and is continuing to expand its application range. The ship inspector training simulator was developed to allow a ship inspector to experience and increase their knowledge of the rules, safety regulations, and for senior surveyors to test their knowledge of different ship types in a virtual ship environment. The inspector can check that the information matches the real ship shape using text, images and video, and two or more surveyors can simultaneously participate in the virtual reality simulation to undertake virtual ‘On The Job Training’. This VR-based Vessel Inspector Training Simulator allows the inspector to experience a sense of realism that is almost identical to the actual site, without any limitations in time or place. This can significantly enhance the safety awareness of the inspector and improve his competence by identifying and allowing him to experience risk factors in the field, in advance.
Lastly, KR has been working to develop a 3D model-based design approval system since 2017, all with the aim of supporting enhanced productivity in the shipyards and providing a more accurate and intuitive review of ship structure for the classification societies. Traditionally, the design approval of a ship by a classification society has been a paper-based process, involving the exchange of numerous large-format drawings between the shipyard and the classification society. Now KR has developed a 3D model-based design approval viewer which supports multiple platforms such as PC (MS Windows, linux) or mobile devices such as tablet or smartphone (Android, iOS). This means that the same 3D model and corresponding comments from the plan approval surveyor can be accessed on the mobile devices of the field surveyors in the shipyard. In addition, the 3D model, its associated information and engineering data can now be managed through the ship’s lifecycle as the digital twin. A web browser-based 3D model viewer is now under development, which will allow the 3D model to be shared without requiring a file transfer, thereby protecting the customer’s intellectual property.  

How is KR investing today to prepare for its tomorrow?
To answer this question, we must think about the role and responsibilities of classification society in the future. The traditional role of class providing an important contribution to the maritime industry through technical support, compliance verification and R&D will be unchanged. However, what will change are the demands from the industry, as industry responds and adapts to the challenges of the fourth industrial revolution.
Moving forward, KR will do its utmost to remain a reliable expert classification partner to the maritime industry. As a class, KR will invest in enhancing its core competencies by developing the quality of its surveyors, its classification rules and standards and its R&D capabilities. While focusing on this, KR will also endeavor to anticipate and meet the growing demands from the industry in relation to the fourth industrial revolution. For example, KR’s ICT Center will focus on finding ways to apply big data to operate vessels more efficiently, to identify safe navigation routes in real time, to understand accident statistics and manage risk better and to predict ocean characteristics, while using CBM (condition based monitoring and maintenance) to alert vessels to device failure. The ICT Center is also developing new software test standards in line with ISO 25000, to verify the quality of IT software and will be able to offer its clients new comprehensive software test services shortly.
In addition to the fourth industrial revolution, KR has been investing in alternative energy sources for a cleaner environment. KR has been conducting R&D to develop hydrogen as a marine fuel, with further research into the transportation technology for liquid hydrogen by ships. For wind energy, KR has provided wind turbine certification services including type certification, component certification and project certification, and KR has also developed technical guidelines of onshore and offshore wind turbine design.

How will “class” look, act and evolve in the coming decade?

The purpose of a Classification Society has always been to provide classification and statutory services and to help the maritime industry and regulatory bodies to ensure maritime safety and prevent pollution. These objectives will remain uppermost for all classification societies but the way these objectives are delivered will change significantly as a result of digitalization. Digitalization especially Big Data is expected to influence the scope and/or frequency of class surveys in the yards, ports and even in the office and the services that Class has traditionally offered to industry will be more digital-based.

Provide some insight on the value of IACS in today’s maritime world?
The traditional role of IACS, which is to make a unique contribution to international shipping through maritime safety and regulation by providing technical support, compliance verification and research and development, has stood the test of time and will continue to do so long into the future.
However, with the fourth industrial revolution becoming more and more embedded in the maritime industry, new technologies and ideas such as autonomous ships and digitalization are increasingly driving innovation. With the introduction of new technology such as Big Data, Remote Monitoring/Diagnosis (RMD) and Condition Based Inspecting/Maintenance (CBM), the industry is looking to IACS and its member societies to help them meet these new challenges.
IACS has investigated the implications of new technology on the survey regime and is developing new and amending existing, technical requirements for Condition Monitoring and Condition Based Maintenance schemes. IACS is examining instances where the condition monitoring results are used to influence the scope and/or frequency of Class survey for machinery components and systems, and the requirements for software, onboard working, documentation, personnel, approval, as well as the survey application for applying the scheme, and survey/audit to maintain the scheme.

As you now lead this international organization, what is your agenda for IACS in the coming 24 months? What do you hope to achieve?
Delivering on the core elements of quality, transparency and technical leadership will be key to my chairmanship of IACS.  
Specifically, this means rolling out the series of Recommendations on Cyber Safety, implementing the strengthened quality benchmarking criteria and continuing to increase IACS transparency and clarity through the publication of documents such as the Annual Review, and a series of position papers on pressing issues such as the 2020 Global Sulphur Cap and ballast water management.
In addition, during my chairmanship, IACS will closely monitor the work of the IMO on autonomous vessels and GHG (greenhouse gases) to ensure that the association is able to make meaningful contributions to the IMO and the industry on these key issues which will shape the future of international shipping.




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